US stocks, bonds and the dollar were set to slide further this week as the sex scandal threatening Mr Bill Clinton's presidency deepens, plunging the markets into more uncertainty, analysts said.
President Clinton is not expected to discuss the scandal in public until after his State of the Union address tomorrow evening, thereby prolonging mounting unease on Wall Street.
"There is no reason to feel there will be any difference from the way bonds, stocks and the dollar behaved on Friday when all three went down," said Mr Alan Ackerman, market strategist at Fahnestock & Co.
"he president's silence leaves many questions unanswered, and may affect the significance of the State of the Union message. It continues to string out the uncertainty that Wall Street finds unacceptable," Mr Ackerman added.
Privately some analysts believe Mr Clinton may have to resign and leave the Vice President, Mr Al Gore, to take up the reins.
Traders partly blamed the scandal for the slide in the dollar and the bond Friday, along with volatility and modest losses in stocks.
"We are still trying to discern how the markets are reacting to the president's problems," Mr Philip Braverman, chief economist at DKB Securities, said. "Nothing has happened to clear the air."
The worry is that a White House paralysed by scandal will be ineffective in dealing with international issues such as Iraq, and in garnering Congressional support for more cash to bail out South Korea, Mr Braverman said.
Apart from keeping up with the unfolding Clinton scandal, the financial markets also face this week a slew of economic indicators, more corporate earnings reports and Federal Reserve chairman Mr Alan Greenspan's update on the economy.
Mr Greenspan is set to speak before the Senate budget committee on Thursday, and then before the House banking subcommittee on Friday where he will be joined by Treasury Secretary Mr Robert Rubin and his deputy, Mr Lawrence Summers.
They will describe Asia's impact on the United States as talks to resolve South Korea's debt crisis near resolution, though Japan is still mired in recession. Other indicators due this week include durable goods orders in December on Wednesday, and fourth-quarter Gross Domestic Product on Friday.
